Whats the difference between an accountant bookkeeper and tax agent

What's the difference between an accountant bookkeeper and tax agent

It sounds like the beginning of a bar room joke, but in all seriousness and despite their stereotyped images, there are fundamental differences between the three positions.

Just as the typical view of all three being straight-laced humourless nerds is obviously incorrect and prejudiced, so is the perception that all three do roughly the same job.

Understanding the differences between the roles that each performs is vital to deciding whether it is an accountant, a bookkeeper or tax agent you need to hire to keep your business on track.

So, let’s take a closer look at each job description.

The accountant

Once again, not all accountants do the same thing. You might assume that we are mostly concerned with tax and compliance issues, but this is far from the full picture.

Just as doctors practice different types of medicine – think of general practitioners and specialists like paediatricians, psychiatrists, oncologists, and more – so the accounting profession covers many areas of expertise.

These range from in-house company accountants, management accountants, tax accountants, financial planning accountants, cost accountants, and the list goes on. Also, bear in mind that accountants often have more than one qualification or specialty.

And as expected, each type of accountant has vastly different working environments which demand a specific set of skills to solve vastly different problems, meaning there is usually little in common between them. A tax accountant probably knows very little about managing business accounts just as a plastic surgeon will most likely not be able to perform open-heart surgery.

The bookkeeper

Bookkeeping is defined as the allocation or processing of financial transactions. In truth, bookkeeping is the foundation of accounting which means there is often an overlap between its role and accounting.

While bookkeepers do not typically hold degrees, there are a few who are qualified as accountants but who choose not to practice as such perhaps because they don’t wish to or don’t yet have enough experience.

Following on from the medical analogy above where we compare accountants with doctors, we could say that bookkeepers would be the nurses in this equation. As such, they are responsible for daily tasks like processing invoices, paying the bills, and handling the payroll.

In this scenario, however, it will be up to the accountant to ensure the budget allocations are correct, prepare and analyse reports, and that all the compliance requirements are being met.

The tax agent

Essentially speaking, a tax agent is a specialist accountant who has studied the law and matters regarding tax and compliance. Once qualified, a tax agent is registered by the Tax Practitioners Board which means he/she is licensed to provide tax services to the public. The license, however, is not for life and must be renewed every three years.

Also, while tax agents and accountants have very different functions, it is possible for their roles to be performed by the same person.


Hopefully, the above summary makes the main differences between accountants, bookkeepers, and tax agents far clearer, and gives you a better idea of which “hat” you need for your organisation to succeed.

What now?

Whether it is the services of an accountant, a tax agent or a bookkeeper that you require, SMART Business Solutions can assist you. Team up with us today to ensure the financial future of your company.


Want to grow your business & improve cash flow?

You need SMART solutions for YOUR business, not just annual tax compliance! Get the SMART team working with you. Call SMART Business Solutions today on 03 5911 7000 or reception@smartbusinesssolutions.com.au.



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